Levi’s (NYSE: LEVI) Q3 results left something to be desired, with revenue growth below forecast and margins impacted by headwinds. However, tepid as the results may be, the company continues to grow, profit, and drive cash flow, which is what matters.
The opportunity today is value and yield, with consumer headwinds pushing the stock price to long-term lows and disconnecting it from its value. The value lies in the brand, which is iconic and well-entrenched with a loyal following, and the strategic shift toward direct-to-consumer (DTC) channels. DTC is a much-needed lifeline, reinvigorating the business by enabling higher-margin capture, reducing working capital needs, and driving growth.
